Syria tilts towards the West as Gulf capital drives post-Assad recovery

The National

08-06-2025

After more than a decade of war and isolation, Syria is edging back into the global economy. The signs are familiar: commercial flights have resumed, sanctions are being eased and its debts are being cleared. Gulf investors are circling. Infrastructure deals are being announced. The headlines suggest the country is on the cusp of reintegration.
But this is not simply an economic reawakening. It marks a deeper geopolitical repositioning – one that places Syria within a widening western and Gulf-aligned bloc, as influence from Iran and Russia recedes.
Syria's recovery will not be decided by GDP charts alone. It will depend on whether the country can reclaim enough political agency to rebuild on its own terms – or whether, like Iraq before it, Syria becomes a postwar economy designed around the interests of its financial and political sponsors.
Sanctions relief from the US and EU has reopened the door to international investment in Syria, particularly in energy. The policy shift has catalysed a wave of Gulf-backed deals, most notably a $7 billion agreement involving Qatari, Turkish and US companies to rebuild Syria's power infrastructure. These developments signal more than capital flows, they point to a convergence of western and Gulf interests.
The energy deal led by Qatari companies is the clearest bellwether. It follows a well-established template seen in postwar Iraq, where US and western firms including ExxonMobil and Shell helped rebuild the oil sector in ways that aligned output with western markets. With Russian and Iranian influence in Syria greatly diminished, its energy sector is being restructured to serve a different geopolitical order.
Syria's new economic vision is increasingly shaped by partnerships with Gulf nations. Flights from Dubai-based airlines to the Syrian capital Damascus are resuming. Saudi Arabia and Qatar have paid Syria's arrears at the World Bank. Major regional banks are exploring correspondent relationships with Syrian institutions – something that was unthinkable just a year ago. The momentum is clear.
This pivot also hints at Syria's eventual role in a broader integration of regional infrastructure. Syria is not formally part of the Iraq Development Road (IDR), a $17 billion infrastructure project that aims to facilitate trade between the Gulf and Europe through Turkey. But recent infrastructure moves suggest a potential alignment.
Syria is negotiating a $300 million fibre-optic project with Gulf telecoms companies under the SilkLink initiative and it has signed agreements with Gulf and French firms worth more than $1.5 billion to develop its Tartus and Latakia ports. These projects aim to restore Syria's position as a logistical bridge and may yet dovetail with broader regional integration efforts, such as the IDR.
Gulf support for Syria is driven in part by strategic considerations. With a population exceeding 20 million and a pressing need for reconstruction, Syria offers economic opportunities in sectors including energy and infrastructure, attracting interest from Gulf nations seeking to diversify their own economies beyond oil.
Six months after former president Bashar Al Assad was deposed, Syria remains deeply unstable, but the direction of travel is unmistakable. Political volatility persists, with pro-Assad insurgents challenging the government, led by President Ahmad Al Shara. Sanctions have been eased, yet investors remain cautious. A true investment boom will require more institutional guarantees and credible reforms.
Yet Syria's fundamentals are hard to ignore. Its geography gives it access to five key markets (it borders Turkey, Iraq, Jordan, Israel and Lebanon) and a Mediterranean port system, offering direct access to Europe through the Suez Canal. It has natural resources, untapped agricultural capacity and a large, dispersed diaspora, including millions of highly educated Syrians who fled to North America and Europe after the civil war broke out in 2011. If Syria can secure peace and policy credibility, it has the potential to become, over time, a regional node for trade, logistics and skilled industries.
So, what kind of state might Syria become? The Iraq model is one possibility, an externally funded recovery shaped by competing interests and vulnerable to internal fragmentation, though Syria's more diverse international backing could set it on a different course.
Another, more aspirational model is the UAE, a service-driven economy boosted by expatriate talent and foreign capital. But unlike Syria, the UAE built from a foundation of stability and oil wealth.
The more plausible path is somewhere in between: a hybrid economy rebuilt with Gulf capital and western acquiescence, plugged into regional logistics but still dependent on foreign support. However, Syria could become globally connected, but politically constrained, with its economic direction increasingly shaped by the terms set abroad.
That raises longer-term questions about sovereignty. Syria remains heavily dependent on external support for reconstruction, currency stability and basic financial credibility. Its future will hinge on whether it can preserve any meaningful policy autonomy while accepting sustained foreign involvement.
The signals to watch over the coming year will be telling: foreign direct investment, particularly in infrastructure and education; return migration from Europe and North America; and concrete steps towards institution-building. If the country invests in people, not just in roads and power plants, its recovery may be sustainable.
If those signals fail to materialise, Syria risks being increasingly shaped by the interests of its backers. It is not returning to the global stage as a neutral actor. It is returning with its orientation, at least economically, tilted towards the West.